By Ann Hogan, Class of 2018
It is no secret that repealing the Affordable Care Act (ACA) is a top priority on the Trump Administration’s agenda. It is predicted that the use of Health Savings Accounts (HSAs) will increase and may be used as a replacement for the ACA. The Republicans favor competition among the insurance companies rather than a government-mandated program. Thus, HSAs will rise in popularity as it gives the individual more flexibility and control over their healthcare.
Enacted by Congress in 2003, Health Savings Accounts are usually paired with a high deductible insurance policy and allow both the policyholder and their employer to contribute money into the account for medical expenses without being taxed. Simply put, HSAs are a tax-free savings account to be used specifically for medical expenses. HSAs limit the amount of money that can be contributed to the account each year. In 2017, the policyholder and their employer may contribute up to $3,400 to an HSA for individuals and $6,750 for families. Policyholders age 55 and older can contribute an extra $1,000 each year. However, unlike the “use it or lose it” function of Flexible Spending Accounts (FSAs), HSAs allow the policyholder to keep their balance and continue saving from year to year. Another attractive feature of the HSA is that the policyholder can take their HSA with them if they were to switch jobs or insurance providers.
The Trump Administration believes that the increase of HSAs will give individuals more control over their health care decisions and costs resulting in better quality outcomes in care and cost. According to the 2015 Census of Health Savings Account – High Deductible Health Plans, AHIP Center for Policy and Research, Nov. 2015, “nearly 20 million Americans have an HSA.” The Report from the Health Care Reform Task Force states that House Republicans have proposed HR 5324: Health Savings Account Expansion Act of 2016 by Rep. Dave Brat. While the healthcare reform process will be slow to change, the utilization of HSAs are predicted to increase.